The Morning Call
t
The
Market
Technical
Wednesday in the
charts***I can now copy ZeroHedge links for your reading pleasure
Wednesday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/market-performance
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
The meaning of
high margin debt.
https://trendlabs.com/this-chart-is-designed-to-scare-you/
The high
volatility factor is here to stay.
One of these
markets is wrong.
Thursday morning
setup: US equity futures are
lower as WTI breaches $90/bbl and Brent approaches $100/bbl (Houthi escalation
in the Red Sea as two Saudi tankers were struck), pushing bond yields higher
with longer-dated yields seen making new highs, globally. But Alphabet's
underwhelming results - while dragging down Mag7 names - are boosting Semis /
AI (CapEx spend) which may mean the market is returning to its barbell of longs
in AI / Semis plus Energy versus shorts in Rate-sensitives. Overnight saw oil prices extend their recent
resurgence with WTI crude topping $90/bbl. The Iran-aligned Houthis
said they targeted two oil tankers in the Red Sea, potentially opening up
another front in the war.US forces struck Iranian military targets including
maritime capabilities, missile and drone storage facilities, coastal
surveillance sites, and air defense assets, Centcom said. Commodities are
led by the Energy complex; Base is higher, Precious is lower, and Ags mixed.
Pre-mkt, US yields are up 3-4bps across the curve with USD
flat. The surge in crude prices has dragged rate-hike odds higher (July very
much back on the table)...In Equities, Mag7 is weaker with all 7
names lower with GOOGL, TXN, TSLA, and IBM all lower following
earnings. Semis / Memory are bid. Defensives and Energy are
higher with Cyclicals mostly lower ex-Industrials which are being boosted as
part of the AI theme. Utils are bid with AI outweighing higher yields. European
stocks fall as technology shares are dragged lower by STMicroelectronics, which
slumped 17% after disappointing with its sales outlook. Elsewhere, Nestle
posted its biggest intraday drop since 2020.Stoxx 600 falls 0.6% to 642.78 with
405 members down, 184 up, and 11 unchanged. Asian shares rose as sentiment
improved on expectations that regional tech hardware companies will benefit
from Alphabet’s plans for more AI spending.
Fundamental
Headlines
The
Economy
US
Weekly initial jobless
claims totaled 187,000 versus forecasts of 212,000.
The June Chicago national activity
index came in at -0.2 versus expectations of +0.14.
International
The Q3 UK business
optimism index was -36 versus estimates of -40; the Q3 industrial trends orders
index was -45 versus -40.
Other
The middle class isn’t disappearing; it is
getting richer.
https://committeetounleashprosperity.com/hotlines/middle-class-isnt-disappearing-its-getting-richer/
The good news about the economy.
https://www.carsongroup.com/insights/blog/dont-worry-be-happy/
The case for a weaker dollar (but I don’t
think it a very strong one).
https://giftarticle.ft.com/giftarticle/actions/redeem/6f81f3d3-e6bf-46da-87f7-893a64bc4f54
Iran
Overnight news.
Monetary
Policy
ECB leaves rates unchanged.
Inflation
Increasing worries over inflation and rising
yields.
https://www.capitalspectator.com/iran-tensions-revive-worries-over-inflation-and-rising-yields/
Tariffs
Trump’s new Canadian tariffs simply prove that
tariffs don’t work.
AI
More on the open (China) versus closed (US)
AI models.
https://werd.io/american-ai-is-locked-down-and-proprietary-its-losing/
AI’s balance sheet time bomb.
Investing
Security is an increasingly
important factor in capital allocation.
Is the bull
finally breathing?
https://www.optimisticallie.com/p/a-full-bull
Private equity
assets stuck in ‘zombie funds’ are at an all-time high.
News on Stocks in Our Portfolios
What
I am reading today
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